When you list you house for a certain amount and say that's as low as you can get, why do they offer less?

Question

We told them what we needed to pay off the mortgage, and they still popped back a figure to us that was $20,000 less than what we need. Can I even think they will up their offer $20,000 to our asking amount?

Answer 1

What's the asking price? $20k means a lot less on a $800k property than it does on an $80k one. In the former case, it's a reasonable offer, especially in the market most of the country is facing. In the latter, it's probably a hopeless low-ball.

People want to buy as cheaply as possible. There are real estate sharks who go around from one property to another, doing desperation checks. They make a lot of money because some people are desperate. Even your average family person wants to get the property as cheaply as possible. I am always angry at myself when my clients first offer is accepted, because it means I could have gotten them the property for less, which is what they are paying me for.

What should you do? Ask your listing agent. But when somebody makes an offer that's way too low to one of my listing clients, I always tell them to reject it outright. It saves time. If they want it and they're willing to pay a reasonable price, they'll come back with another offer. If they're just checking for desperation, why should you be interested if you're not desperate?

Answer 2

There are 2 prices in every transaction. 1) What the buyer is willing to pay, and 2) what the seller is willing to accept. If the seller isn't willing to accept as much as the buyer is willing to pay, there won't be a deal. If the buyer is offering more than the seller is willing to accept, a deal is done. The problem with your scenario is that you have either made it look to the buyer like you're desperate or else you've got a "tire kicker" that is only interested in a great deal. Either way, if you're not willing to sell at the price that is being offered, you are under no obligation to do so. You'll just have to wait for the next offer. Also remember that the amount you owe on the house is irrelevant. The house is only worth what somebody is willing to pay. In every major transaction I've made, I've always asked the simple question "What do you NEED to have to do this deal right now." I've always been quoted lower than the original listing price even though I may have been willing to pay it. It only takes a few seconds to save thousands of dollars.

My grandfather tells a great story about a truck that he was trying to sell. He put a nice low price on the windshield and everybody that stopped to ask about it wanted to know what was wrong with it for it to be that low priced, and nobody bought it. He started raising the price on it $50 a week until somebody pulled in and thought it was a great deal and bought it.

Answer 3

They might up their offer if they really want the house but most people like to haggle so they can feel like they are getting a good deal. Why don't you ask for $20,000 more than you need? That way when they offer a lower amount, you will get the money to pay off the mortgage.

Answer 4

That's the process. Most people put a figure higher than they want so there is room to negotiate. Did you have a realtor? They should have told you this. Also if someone is offering you 20,000 less than what you asked does your house need some work? They won't up there offer by that much. If you work with a realtor they usually make an offer of between 3-10% less than what you ask unless they really like it and don't want to haggle. If you don't have a realtor than I would suggest you get one.
Good luck on your sale.

Answer 5

They are bargaining. If you wanted $150,000 for the house then you should have listed it at $180,000. People go into this thinking that you've done that and want to get a deal. It's a game that the industry plays. You list for 180 and want 150, they offer 160 and you say too low. They return with 165 and you say yes. You've got your 150 plus 15 and they feel like they got a deal. It's the way it works.
A good realestate agent knows the game and should not have let you list for your unmovable, rock bottom price. Will they come up the $20,000? I doubt it. Now it looks like you are stuborn and won't work with them. They don't care about you're finances. They care about buying a house. If not you'rs then someone elses.

Answer 6

The prices are going to drop and drop big. Where in the first stage right now, denial. Sellers still don't want to believe it nor do the realitwhores. The story keeps changing from "there's no bubble" to "the market is leveling off" to " a slight correction, prices dropping a little". All that after saying housing prices never drop. Who do you believe, you can't believe the numbers because they throw in a free car, swimming pools, vacations and cash back. They are trying to catch the unaware suckers, I mean buyers, as a last ditch effort before the truth comes out. Housing prices were going up and people were buying out of fear that they would get priced out of the market. Well guess what a lot of people did get priced out of the market and not many are buying nor should they for at least a year until the truth unfolds. Anyone who bought a house in highly inflated markets in the last year actually owe more then the house is worth or lost their down payment. example Phoenix, AZ, San Diego, CA. Please don't believe just read some of the articles below. The market is only going to get worse. If the Fed raises rates the down hill effect will really start to roll. People and flippers who took out these exotic loans such as intrest only, these loans are about to reset which means their payments are about to double. Ican go on and on but I won't, just do your homework and you will see now is not the time to buy.

http://www.fool.com/news/commentary/2006/commentary06082914.htm?source=eptyholnk303100&logvisit=y&npu=y
http://www.foxnews.com/story/0,2933,187831,00.html?sPage=fnc.business/realestate
http://money.cnn.com/2006/08/24/news/economy/newhomes/index.htm
http://housing-watch.com/home.aspx?d=30
http://www.voiceofsandiego.org/articles/2006/08/28/news/01exotic.txt
http://sandiegomarketmonitor.blogspot.com/
http://housingpanic.blogspot.com/

Answer 7

Why did you list it at the lowest you wanted? Also, houses sell for what the market can bear. If you neighborhood has seen a decrease in proces, then you won't get enough to pay off the mortgage. Happened to me awhile back, where I had to pay $5000 more after the house was sold.

The next time I bought a place and sold it 5 years later, I walked away with an excess of 85,000. Best investment I ever made.

Answer 8

$20,000 is an insult & you should tell ur agent not to acept any more offers from that person. Also be wise to agents who want to sell ur home fro a cheap price & make a quick sale . Selling a house is a tough thing, with so many greedy people out there, the sales agents will rip u , the buyers will rip u, stick to ur price & don't take no crap off anyone. everything for sale always sell some time.. Ya a buyer will come along sooner or later , its ur agent I'd be wondering about.

Answer 9

I personally wouldn't even respond to their offer since it isn't serious to begin with. You are only wasting your time. Unless of course it is the only offer you have had then it couldn't hurt to negotiate up which is what they are doing. At some point if it goes on long enough you may decide to take less than your original amount since holding costs like mortgage payments, insurance, etc become a burden and you are losing money on the back end.

Answer 10

Everyone likes to haggle... And they think you're listing it higher to make a profit.

Keep in mind, you're the seller. You set the amount you want to get, but the seller offers you what *they* think the property is worth.

In the market we are in, especially with buyers buying invester homes and then the bubble bursting, you've got few options. Accept the lesser amount and make up the difference yourself, keep the home and keep making payments if you can, keep the house on the market or lose the home to foreclosure.